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2018 Annual Report

Inside every business is a more cognizant one

Helping clients win in the age of intelligence

What does it mean to be more cognizant?

Drawing on extensive knowledge of our clients’ industries, business models and technology environments, we’ve come to see that inside every business is a more cognizant one. A more cognizant business is future-oriented, responds rapidly to changes in its environment, excels at perceiving what customers will want next, and is continuously alert to everything going on across its operations—all because the enterprise is digital to the core.

When a company is more cognizant, it knows more, so it can do more—for its customers, employees and owners. It’s literally built to stay ahead of what’s ahead.

2018 Performance

Sustained growth

$10.3

2014

$12.4

2015

$13.5

2016

$14.8

2017

$16.1

2018

Revenue

in billions
CAGR (5-yr): 13%

$1,885

2014

$2,142

2015

$2,289

2016

$2,481

2017

$2,801

2018

Operating income

in millions
CAGR (5-yr): 11%

Balanced capital allocation

Capital return

through dividends and share repurchases

Growing expertise through acquisitions

In 2018, we expanded our digital, geographic, and industry capabilities

Strong balance sheet

Cash and short-term investments

How we’re helping clients become more digital

Know what makes customers and operations click

More cognizant companies know that to compete and grow, they must deepen the connection between their offerings and their customers. So, we’re helping clients pinpoint areas of opportunity with artificial intelligence and analytics. By uncovering insights using a combination of human understanding and data modeling, these businesses are adapting to give their customers what they want, at the higher speed and lower cost they need.

A Hong Kong chatbot speaks the local language—a mix of Cantonese and English.

One of the world’s leading insurers wanted to serve customers round-the-clock in the Hong Kong market, a region where contact centers are often shut down by typhoons and heavy rains. Cognizant helped this multinational company, doing business in more than 80 countries, create the first AI-enabled virtual agent in the Hong Kong insurance space. Fluent in two languages, which local customers often use interchangeably, the chatbot can respond to 600 FAQs (in Cantonese, English, or a mixture of both) about policy purchases, coverage, claims, and more.

Kvaerner is reducing the millions of hours it takes to build massive oil and gas platforms with the power of AI.

The offshore oil and gas installations Norwegian-based Kvaerner engineers are some of the largest structures ever moved by man, taking up to 1.5 million hours to build. Leveraging digital processes, AI and machine learning, Cognizant helped Kvaerner optimize the design and deployment of these structures—significantly reducing construction time and effort on every project, every shift, every day. Kvaerner has already identified opportunities to reduce the hours it takes to erect and dismantle scaffolding by 25%, and expects that to increase as they continue to streamline processes. And thanks to the mobile devices in their hands, those construction workers and operators have all the information they need to perform their work more efficiently and accurately, reducing errors.

Find better ways to engage and deliver

When companies are more cognizant, they’re aware of operational speed bumps and customer pain points, and look for ways to use technology to leap ahead. By creating proven platforms and solutions designed to meet an industry’s most pressing needs, Cognizant is helping clients reinvent how their employees deliver their most important products, services, and experiences to their customers.

Now, a top insurer can pay 40% of its workers’ compensation claims automatically.

With medical costs rising sharply, insurers face a big challenge: how can they provide injured employees with the care they deserve, and stay profitable? To help, Cognizant created Optima MedWise?, a software platform with dedicated support from registered nurses. By comparing individual claims against a database of similar cases, MedWise users can develop effective treatment plans while identifying charges that may be unnecessary or excessive for clinical review. With MedWise, one top-five workers’ compensation insurer has avoided $50 million in cost exceptions in just one year, by paying 40% of claims automatically.

Stay relevant, responsive, and ready for anything

Companies that are more cognizant don’t just think about what’s ahead—they design their entire business around it. We help clients respond to future customer needs quickly by modernizing their technology backbones with an integrated approach across infrastructure, applications, data, and security. Companies that renew their systems are ready to overdeliver for customers, outscale competitors, and outperform growth targets.

Cognizant’s firsthand knowledge of the technology systems of the world’s leading companies enables us to help them deliver on the high expectations of their customers, accelerate innovation, and unlock new revenue opportunities.

Alliance Data’s customer satisfaction is up to 98%, now that its operations are running on a robust digital infrastructure.

This major—and growing—provider of loyalty and credit card services needed to upgrade its legacy data center to serve greater volumes of customer transactions. Cognizant led a core modernization project that helped Alliance Data create a virtual data center that can handle more than five million transactions a day while offering a better experience built on Cognizant’s IT automation platform, Cognizant® Automation Center. Now, customer satisfaction has soared, system reliability is way up, and operating costs are down by $10 million in the first year.

Loblaw keeps its stores competitive by linking its supply chain and freeing technology talent to innovate.

After a century of expansion and acquisition, Canadian grocery giant Loblaw Companies, which operates brands such as Loblaws supermarkets and Shoppers Drug Mart?, had cumbersome manual processes and unwieldy IT systems that left its food vendors, distribution centers and retail stores in disconnected silos, and its operating costs high. Cognizant replaced the company’s outdated custom-built solutions and tools with ServiceNow? Digital Flows, giving Loblaw a single, efficient platform that connects its IT systems, employees, business functions and supply chain seamlessly. Now, employees are onboarded faster, and the right products get to stores more quickly—critical in today’s ferociously competitive retail environment. The solution has also slashed help desk calls by 20%, support costs by 33%, infrastructure spending by $1 million a year, and perhaps most importantly, freed 25% of Loblaw’s software engineers to innovate with business teams instead of maintaining existing systems.

EmblemHealth reinvented essential HR, finance and supply chain functions with a move to the Oracle Cloud.

Rather than upgrading dozens of disparate systems, EmblemHealth, one of America’s largest non-profit healthcare systems, decided on a major transformation. Consolidating 16 core enterprise applications across three businesses, Cognizant migrated the company’s entire infrastructure to a pure cloud environment via the Oracle SaaS Cloud Program. EmblemHealth and Cognizant reinvented processes across finance, HR and the supply chain with 21 Oracle SaaS Cloud modules, dramatically increasing efficiency and effectiveness of essential business functions such as budget allocation, procurement, recruitment, onboarding, and employee performance management. Now, the company has a “single source of truth” on which to base key decisions, and its IT costs are 30-35% lower annually. Completed in just 11 months, this is one of the largest, fastest Oracle Cloud migrations ever done.

Covanta is ready to meet growing energy needs while protecting the environment, now that it has reaped the full benefits of cloud.

Covanta, a global leader in the growing waste-to-energy industry, had begun its technology modernization journey with a move to PeopleSoft in the cloud, but it still took months to spin up a test environment for a new application. Cognizant helped migrate Covanta to the all-cloud Oracle Cloud Infrastructure, and now it only takes two days to build a new PeopleSoft environment. The new platform has many simultaneous benefits—a 15-20% improvement in batch-processing performance, faster repair of outages, and improved security and governance—all while reducing annual infrastructure spending by 20%. All leaving Covanta better able to pursue its mission of creating sustainable waste and energy solutions that “ensure no waste is wasted.”

At Selective Insurance, 65-70% of E&S submissions are processed straight-through—dramatically boosting the productivity and effectiveness of their underwriters.

After several acquisitions and four-fold growth in net written premiums in its Excess and Surplus (E&S) business, Selective Insurance saw tremendous opportunities for digital business transformation to spur more profitable growth. E&S policies, which insure specialized and complex risks, are typically sold and delivered through general agents. This requires information to be captured in multiple systems, which can increase lead-time before coverage begins. To help Selective address a growing underwriting backlog of new accounts, Cognizant conducted an in-depth assessment of the E&S operating model and developed a digital strategy that streamlined processes, tightened controls, and automated policy reviews to free underwriters for more valuable tasks. With the new processes and system, the underwriting team’s policy review efficiency has improved by 65-70%, revenue and profitability are able to be more tightly managed through real-time dashboards, and Selective and its agent partners can build business together on state-of-the-art digital platforms.

Create interactions that make business more personal

More cognizant companies understand that inside every customer or employee experience is an individual one. They know that how they make customers feel can be as important as price and product, and that the interfaces employees use in their jobs can determine how effective they are. So, Cognizant is helping clients design and deliver world-class experiences that are AI-driven, platform-enabled, and inspired by insight into our most human needs, wants, and ways of working.

Cognizant combines the creativity of an agency with the expertise of a global technology company, developing new experiences and managing marketing, commerce, and content efforts for almost every industry.

When a water treatment system needs repair, the nearest technician may be a virtual engineer from Grundfos.

Demand for clean water—and the treatment systems that help create it, like BioBooster from Grundfos—is outpacing the supply of skilled engineers needed to maintain them. So, Cognizant and Grundfos, a global maker of pumps and water management equipment, built a virtual agent that can diagnose maintenance issues and suggest solutions. The virtual agent interacts with IoT-enabled components, such as dosing pumps, and with onsite technicians via a Microsoft HoloLens augmented reality dashboard and a chatbot. As a result, non-experts at remote facilities can handle complex repairs on their own, with guidance from Grundfos.

National Life digitizes its customer experience—and increases self-service transactions by 260%.

National Life Group, a 170-year-old company that is one of the fastest-growing life insurance companies in the U.S.1, was determined to create a 21st century customer experience. The company partnered with Cognizant to create a roadmap for advancing its overall digital strategy, including developing a new mobile app and enhanced web portal for policyholders. Now, customers can access their policies and conduct business securely any time, on any device—an important step ahead in this industry. National Life has already seen a 260% increase in self-service transactions and a 117% rise in monthly customer visits.

1 Among all reporting life insurance companies from 2013 – 2018 with individual life sales of at least $50 mm in 2013 – LIMRA Sales Rankings, 2018. National Life Group? is a trade name of National Life Insurance Company, founded in Montpelier, VT in 1848, and its affiliates.

Uncover hidden potential in workflows and workforces

When a company is more cognizant, its most essential resource—its people—are free from mundane work that saps the time needed for innovation. That’s why Cognizant is helping clients use automation to take operational performance to the next level: reducing inefficiencies, increasing accuracy, and responding immediately to challenges and customers.

Benefiting from our longstanding investments in vertical expertise, Cognizant automation changes how businesses work for the better, boosting performance by freeing employees to better serve their customers and innovate.

Automation can process Medicare and Medicaid claims six times faster.

Preparing for a sharp rise in claims, particularly in the coordination of benefits area, where payment responsibility must be allocated among several insurance plans, a leading provider of Medicaid and other government health programs in the U.S. looked to automation. Cognizant helped build a claims management system with Pega robotics process automation, integrating it into the insurer’s existing systems. Today, the more than 100 bots in production are resolving claims six times faster, and at a lower cost per claim.

Build digital products while becoming a digital business

More cognizant businesses are able to design and deliver the products and experiences its customers need and want, rapidly. Cognizant helps clients innovate and scale swiftly, from modernizing the applications and platforms that have been at the heart of their business for decades, to designing, prototyping, and delivering new consumer-facing products and experiences. By embracing agile methods that put customers at the center, these businesses and their offerings become faster, smarter, and more capable every day.

Cognizant Softvision uses human insights and future-ready engineering practices to help clients build a new generation of software products and experiences at digital velocity.

Shell’s oil and gas exploration is more predictable and productive, now that software informs drilling decisions.

Shell wanted to give its geologists and engineers better tools to make critical decisions about exploration and production in remote basins. Shell and Softvision, acquired by Cognizant in 2018, worked together to replace multiple legacy, third-party software applications, none of which provided a full picture of a well, with a single custom-built solution that can provide near real-time status alerts. The new software, employed across Shell’s North American exploration and production group, has resulted in higher productivity, lower costs per well, and a significant increase in drilling accuracy.

Platform reengineering helps West Corporation slash product development time and save $20 million a year.

After a series of acquisitions, communications company West—the network infrastructure behind 70% of U.S. 911 calls—had more than 200 legacy applications running on different platforms. Cognizant helped accelerate the modernization of West’s worldwide app portfolio–migrating to a single cloud-native platform and microservices architecture to reduce inefficiencies and satisfy customers who expect them to be as innovative as any technology company. Today, the time West needs to develop and deploy new products has plunged from as much as a year to as little as a few hours.